Shava Nerad on The Epic Fail: it's the (information) economy, stupid.

Shava Nerad shares a new essay, below, about the current economic crisis:

Accounting methods really haven't been updated to keep up with the changes as service and information economy overlays have changed the game. We have no way to account for our greatest assets in the modern economy — talent, staff loyalty, team productivity in innovation, effective communication of information through media and business channels, and so on. These are all without accounting value in our current systems.

Today, value is added by shifting assets through complex smoke-and-mirror complexities in the financial markets. Or, value is created by applying talent (our largest intangible) stabilized by loyalty and passion to task (our least quantified intangibles, and the root of real innovation and productivity) in the information economy.

Tangible industries — heavy industries, retail,… — have been transformed by supply chain innovations, but even globalized, are well enough understood.

But a huge amount of the wealth creation since the invention of the transistor is intangible, and since we have no way to quantify and account for innovation, creativity, excellent records of technical teams, and so on, the market has tried to find tricks to value them, mostly through the stocks of information economy firms.

Since so few people really understand tech, PR, marketing and flim-flam have become the greatest influence on the value of any technical or informationally complex company.

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